The longer you stay in the crypto world, the clearer you can see a phenomenon—during a rally, everyone claims to be a market prediction expert; once it drops, they can’t even tell the difference between a shakeout and a distribution. Just last week, I encountered such a case.

Fan Xiao Ning rushed to me: "MATIC dropped 18%, it feels like a shakeout, right? I want to add to my position and bottom fish."

I was momentarily stunned—if he really went through with that move, it wouldn’t be bottom fishing, it would be jumping straight into a trap.

I told him to take a screenshot of the candlestick chart.

As soon as I looked at the chart, I frowned—

Where’s the shakeout?

It’s obviously a move down with no volume, a key support level being broken directly, with a series of bearish candles swallowing the candles. To put it plainly: this is a run, not a shakeout; this is a smash, not a bottoming; this is a trap, not an opportunity.

But Xiao Ning was still immersed in his dream: "It also dropped before, and after the drop it rebounded, so this time should be the same, right?"

I’ve heard this phrase too many times. Every rookie, when facing a big drop for the first time, likes to use past illusions to comfort themselves about current risks.

I summarized the core difference for him:

A shakeout is meant to lure you into selling; real distribution is about dumping on you so you can’t escape. Shakeouts fall quickly and bounce back fast; heavy dumping drops sharply with little rebound. When you’re adding to your position now, you’re not catching a falling knife—you’re catching the trash others are throwing away.

Then I told him to watch these three points: Did a big bearish candle directly break through the key support? Was there an increase in volume during the decline? After the breakdown, was there a decent rebound opportunity?

These details determine whether you continue to be a leek or learn how to survive in the market. Trading ultimately depends on both technical analysis and mindset. Don’t just look at price increases or decreases—pay attention to volume and support levels.